Will reits go away anytime soon? And if so, why?
Terry Says: REITS are Real Estate Investment Trusts — a concept created in the 1960s to allow owners of real estate to securitize their assets — but only if they pass 90 percent of their income on to shareholders in the form of dividends (and a partial return of investment if properties are sold). There are now literally trillions of dollars worth of real estate equity in these securities — and I can not imagine that the tax code would be changed to prohibit them.
There are all types of REITS – – some specialize in office properties, or hotels, or industrial warehouses — the list is endless. And each has different risks, though most typically have far higher yields than you could get in insured deposit accounts in a bank. Think back to 9/11 — when no one could travel. Hotels lost money instantly — and the share prices of hotel REITS fell sharply. Office REITS are less volatile, because leases are longer. But a prolonged economic slowdown did impact their shares.
To learn every you want to know about REITS go to www.REIT.com — an informative website sponsored by NAREIT, the national trade group. There you’ll also find a searchable directory of REITS in ever category.